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The Importance of Teaching Financial Skills to Gen Z
As Gen Z prepares to step into the adult world, they are navigating a landscape marked by inflation and an unpredictable job market. This generation is facing unique challenges that require them to develop strong financial habits early on. According to a recent report, many young adults between the ages of 18 and 25 feel their traditional education did not adequately prepare them for managing money. Fortunately, it’s not too late to help them build essential financial skills.
Skill #1: Investing
Investing is often seen as something only experts do, but this isn’t true. Victor Wang, CEO of Stockpile, an investing education platform, emphasizes that kids can start learning about investing at a young age. By letting them make small investment choices and focusing on companies they are interested in, children can gain excitement and understanding about the process. Through real gains and losses, they learn about risks and rewards, which is crucial for long-term financial success.
Skill #2: Utilizing Credit
Credit plays a vital role in everyday life, from renting an apartment to securing lower insurance rates. CJ MacDonald, founder of Step, a financial platform for Gen Z, highlights the importance of teaching kids about credit early. Starting with platforms like Step allows teens to build credit responsibly at a young age. This helps shape their confidence before they encounter misinformation online. By utilizing credit apps, parents can actively teach responsible usage and ensure timely payments.
Skill #3: Filing Taxes
Taxes can be intimidating, but they don’t have to be. MacDonald recommends using resources like Step’s Money 101 curriculum to teach high school students about taxes, paychecks, and savings. Understanding tax brackets, deductions, and how to file taxes is essential. By making taxes a manageable part of adult life, children can approach them with confidence rather than fear.
Skill #4: Budgeting and Saving
JR Williams, a father and Senior Director at Ally Invest, suggests making money management fun for kids. He offers several ideas, such as using jars labeled for spending, saving, and giving. Encouraging kids to earn an allowance through chores teaches them the value of money and thoughtful spending. Activities like running a lemonade stand can also help them understand earning and managing expenses.
Skill #5: Working Side Hustles or Gigging
Earning money through side hustles is a skill many Gen Zers wish they had more guidance on. CRMFeed can help young children spot opportunities in their neighborhoods, such as mowing lawns or walking dogs. These small jobs teach the basics of earning side money. As children grow older, they can learn to network and expand their horizons, developing skills that will serve them well in the future.
Skill #6: Building a Resume
A resume is not just a list of experiences; it’s a way to showcase accomplishments. Sam Wright, Head of Operations & Partnerships at Huntr, emphasizes the importance of helping teens understand the “why” behind their resumes. By connecting experiences to their goals, they can build a stronger narrative. Tools like Huntr’s Resume Review can help refine their drafts and make them more effective.
Conclusion
Teaching financial skills to Gen Z is crucial for their future success. By starting conversations about money early, parents can help their children navigate the complexities of adult life with confidence. From investing and utilizing credit to budgeting and building a resume, these skills form the foundation for financial security. With the right guidance and resources, Gen Z can develop the habits needed to thrive in an ever-changing world.
